The Standing Committee of the 14th National People's Congress (NPC) concluded its 12th session on Friday in Beijing, passing a proposal by the State Council to increase local government debt limits. This move aims to replace existing hidden debts and marks the official launch of a new round of the \"debt risk defusing\" measures in the country.
Finance Minister Lan Fo'an confirmed this plan during a press conference on October 12, emphasizing a significant increase in debt limits to address the hidden debts held by local governments. Under the proposal, the local government debt limit will rise by 6 trillion yuan ($822 billion), increasing the special debt limit from 29.52 trillion yuan to 35.52 trillion yuan by the end of 2024.
Local governments play a crucial role in China's economic development and reform. Enhancing their debt capacity is expected to invigorate local projects and drive high-quality economic growth in the next phase. This strategic financial adjustment is seen as a vital step towards sustaining the momentum of economic prosperity across various regions.
Reference(s):
China's 'debt risk defusing' plan set to boost economic development
cgtn.com
